Lincoln Annuities

Lincoln Financial Group (the marketing name for Lincoln National Corporation) is a full-service financial company offering insurance, investment and fund management services. Its headquarters are in Radnor, PA. It offers annuities through its affiliates, the Lincoln National Life Insurance Company and the Lincoln Life & Annuity of New York, which rank near the top in sales of variable annuities. The Lincoln National Life Insurance Company is one of the largest and most successful life-insurance companies in the U.S. The Life Insurance Market Research Association’s (LIMRA) annual survey declared it #1 in life insurance sales for 2007.

In the third quarter of 2006, DALBAR ranked the Lincoln Financial Group Web site #2 in its quarterly ranking of customer-friendly Web sites. In 2005, the company ranked among the 100 best companies for working mothers for the 19th time in the previous 20 years, according to Working Mother magazine.

History

The Lincoln National Life Insurance Company began operations on June 11, 1905, in Fort Wayne, IN. Its 33 founding investors chose the name “Lincoln” in honor of President Abraham Lincoln, to denote dependability and honesty. Robert Todd Lincoln, the President’s only surviving son, gave permission for his father’s name and likeness to be used by the company. In 1931, the company started the Lincoln Historical Research Foundation. The Foundation opened a museum containing Lincoln artifacts, documents and memorabilia in Fort Wayne in 1931. The museum still exists.

The company grew rapidly. By 1911, it had $6.5 million in life insurance in force. Between 1914 and 1940, it added an additional $250 million. Its growth rate between 1905 and 1955 was the largest of any American life-insurance company; by 1955, it was the 9th-largest insurance company in the country. In 1968, Lincoln National Corporation became the first U.S. insurance holding company. In 1973, the company began offering mutual funds and investment-advisory services.

After 1990, Lincoln Financial Group dropped its property and casualty insurance lines and reinsurance operations. In 1995, it acquired the prestigious Delaware Investments to beef up its investment operation. As the century dawned, the holding company purchased the life insurance and annuity operations of CIGNA and Aetna. IN 2006, it merged with Jefferson National Pilot to produce the financial powerhouse of today.

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Lincoln Annuities

Lincoln annuities include fixed, indexed, immediate and variable annuities. Its fixed-annuity product is a single-premium deferred annuity. Its three indexed fixed annuities include both single-premium and flexible-premium products. Its two immediate annuities, both single-premium products, include an inflation-indexed annuity. Lincoln Financial Group produces two suites of variable annuities, each containing 10 distinct variable-annuity products. (The company’s New York affiliate offers annuity products modeled on the foregoing, but with terms modified in accordance with New York law.)

In 2008, the Morningstar Annuity Research Center ranked the company #1 in non-captive sales of variable annuities for the first half of the year. (Non-captive sales are executed by independent agents who are not bound exclusively to the products of one insurance company.)

Financial-Strength Ratings of Companies Issuing Lincoln AnnuitiesThe four major ratings services rate the financial strength of Lincoln National Life Insurance Company and the Lincoln Life & Annuity Company of New York. According to the company Web site, those ratings are as follows:

A.M. Best: A+ (2nd-highest of 16 categories)

Standard & Poor’s: AA- (4th-highest of 21)

Moody’s: A2 (6th-highest of 21)

Fitch: A+ (5th-highest of 21)

News

On July 10, 2009, Lincoln Financial Group announced the successful completion of its $2.1 billion capital-acquisition program. The money was raised by issuing common and preferred stock and taking on debt. The group contributed $1 billion to the capital base of the Lincoln National Life Insurance Company. $950 million was obtained by issuing preferred stock to the federal government as part of the U.S. Treasury’s Capital Purchase program, which is designed to promote economic growth.

On June 25, 2009, the Federal District Court upheld a jury verdict on favor of Lincoln Financial Group in its patent-infringement suit against Transamerica Life Insurance Company. The suit involved the use of a computerized system for administering variable annuity accounts - specifically, those accounts containing products that offered guaranteed minimum payments combined with systematic withdrawal programs.

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